The creative force of a worker exodus
As record numbers of American workers quit, many take jobs that offer more opportunity to innovate. The healthy churn has helped raise productivity and could dampen inflation.
Americans are quitting their workplaces at a record pace – 4.3 million in August – which may be one of the most unexpected shifts as the pandemic eases. Yet it may also be one of the most promising for the U.S. economy.
Many of these “quits” are people who simply seek more pay or less stress. Yet others want to use and grow their skills with employers who – again, because of the pandemic – need the intangible capital of worker creativity to be resilient in a disrupted economy.
The result so far is another unexpected change. The U.S. productivity rate rose more than 2% so far in 2021 after years of mediocre growth, signaling a burst of innovation. More restaurants, for example, are rapidly digitizing the task of taking food orders. After a year of working remotely, employees find their offices operate with faster decision-making and less hierarchy.
In addition, the higher productivity might help dampen concerns about inflation. While wages have risen sharply in the new competition for workers, many employers may also be able to provide better and cheaper services and products – the definition of productivity – thus possibly keeping a check on a general rise in prices.
Will this current virtuous cycle between workers and businesses be sustainable?
“While optimism is warranted, exuberance is not,” states a paper by the World Economic Forum. “On the other hand, business leaders should be exuberant because their instinct is to make the most from [a crisis] and innovate.”
At the least, the United States could be going through one of its most creative periods. And it is not alone, based on a ranking of the world’s economies on innovation capacity and output.
The latest Global Innovation Index, issued in September, found “that new ideas are critical for overcoming the pandemic and for ensuring post-pandemic economic growth.” Worldwide, a number of key factors for resiliency – scientific output, spending on research, new patents, and venture capital deals – all rose last year during the pandemic, the survey found.
While many countries are still suffering from COVID-19, their people can take heart from these latest trends in the most productive economies. The search for greater creativity and innovation – whether by workers or businesses – is a latent force for progress. It doesn’t take a crisis to start that search.